Futures Market News
Yen plummets as Fitch cuts credit ratings
May 22, 2012 12:34 PM
The Japanese yen dropped against the U.S. dollar the largest amount in one month on Tuesday, as markets reacted to the decision by Fitch Ratings to cut the country's credit rating.
Bloomberg reports that the credit ratings service decided to downgrade Japan upon deciding it was taking insufficient action to alleviate its growing debt problems.
Prime Minister Yoshihiko Noda, according to The New York Times, has relied largely upon an plan that would increase consumption taxes to 15 percent, but Fitch argues that the country will still see its debt-to-GDP ratio hit 240 percent by the end of the year.
The country's long-term international currency rating and its domestic currency rating were both lowered to A+, from AA and AA-, respectively. That rating puts Japan just ahead of Greece in terms of risk of investment.
In response, the yen fell against all 16 of its major rival currencies. At 11:22 a.m., the Yen fell 0.81 percent against the dollar.
"Everyone has been betting on a weaker yen for some time now and we’re finally starting to see signs of that," Blake Jespersen, managing director of foreign exchange at Bank of Montreal, told Bloomberg.
Don’t Miss Our News Updates!
Share dt News:
Follow our breaking news stories and get a unique take on current events that may impact the commodity futures markets. Multiple new articles are posted each weekday. Subscribe to our commodity news updates by email, and receive real-time updates with our RSS feed, follow us on Twitter @DanielsTrading, become a fan on Facebook to stay informed.
SPECIAL OFFER: Euro/Dollar in a Time of Crisis
Sign up for our FREE report and gain insight about the current global crisis through our extensive research and analysis!
Download this exclusive report as we examine current global events, the present impacts on market prices and volatility, and potential outcomes of the Eurozone crisis.
Special Offer
Register for Your Free 2-Week Trial of the dt Insider Market Advisory!
With your free trial membership, you'll receive full access to our exclusive trade recommendation service and all of the timely and accurate trade information you need to feel comfortable participating in the markets.
